Genuine Progress Index for Atlantic CanadaIndice de progrès véritable - Atlantique

Measuring Community Wellbeing

Measuring What MattersDundee, Scotland

27 March, 2009

3 Themes Today

• Measurement as a powerful tool to engage communities

• Economic valuation as powerful means to engage policy makers

• Relevance and utility in current economic downturn

Indicators are Powerful

What we measure:

• reflects what we value as a society;

• determines what makes it onto the policy agenda (e.g volunteers);

• influences behaviour (students): & What we don’t count doesn’t get attention

A good set of indicators can help communities:

• foster common vision and purpose;

• identify strengths and weaknesses;

• hold leaders accountable at election time

• evaluate which programs are working or not

• initiate actions to promote wellbeing; + agreed targets can change public behaviour

What kind of community are we leaving our children...?

• Community safety, trust – “Do you feel safe...?”

• Health vs sickness

• Decent living standards vs poverty; equity

• Educated vs ignorant

• Clean air, safe drinking water, healthy envt. vspollution, health hazards

• Time balance (paid/voluntary/free) vs stress

• Strong communities, social supports= Consensus values - Beyond politics & ideology

Counting it Wrong

• Resource depletion as economic gain

• Negatives can make economy grow

• Unpaid work counts for nothing

• How much income/wealth but not how it’s distributed

-> Misleading signals to policy makers and general public (e.g. GHGs)

Therefore – In the GPI:

• Natural wealth, health, free time, unpaid work, and education have value

• Sickness, crime, disasters, pollution are costs

• Reductions in greenhouse gas, crime, poverty, ecological footprint are progress

• Growing equity signals progress

GPI Atlantic = Non-profit, fully independent, NS-based research and education organization founded April, 1997. Web site: www.gpiatlantic.org

Provincial -> Community

• Where rubber hits road in QOL; BUT Statcandata not available at comm. level

• Kings County, Glace Bay – Contrasting communities - Consultations, survey design

• 2+ hours; Sample size = 3,600 (2 cross-tabs –95% +/- 3%); Statcan oversight

• Response rate = 70+% Kings; 82% GB

Survey components include:

• Economic wellbeing – including income, employment and job characteristics

• Subjective wellbeing: life satisfaction, happiness• Core values and guiding life principles• Social supports and networks, formal and

informal volunteering, and care-giving• Health status, incl. self-reported health, chronic

disease prevalence, activity limitations, and prevention (e.g. mammograms, blood pressure tests)

• Lifestyle behaviours, incl. smoking, diet, physicalactivity

• Mental health, including cognitive ability, stress,and depression

• Children’s health, including health status, mental health, cognition, and chronic conditions

• Environmental behaviours (e.g. transportationpatterns) and ecological attitudes

• Safety and security, including victimization rates and subjective feelings of safety.

Full survey – see:

Each category has several indicators (results in charts)

E.g. employment section will have results on: • Unemployment (short + long-term)• part-time employment • work schedules• job characteristics• multiple job holding• discouraged workers• proportion of jobs with employee benefits

Sample results:Economic Security

Glace Bay Kings

Unemployed 26.4 12.7

Discouraged 40.9 16.3

Multiple Jobs 5.1 11.0

% Households <$20,000

28 14

Life-Satisfaction (+ Happiness)

Glace Bay Kings

Very Satisfied 40.3 39.4

Somewhat Satisfied

50.3 53.4

Dissatisfied 9.3 8.2

Health Status• No significant difference in self-reported health

• GB had higher rates of disabling pain, chronic diseases, smoking

• Strong relationship to income and employment in both communities

• Low vs high incomes = 3x rates of severe pain, discomfort, daily smoking, health-related activity limitations; 2x HBP, arthritis, chronic diseases. U.e.: ½ as likely satisfied as w. jobs

Very good to excellent health %cf across income + GB/Kings

-20000 20000-34999

35000-49999

50000-69999

70000+

Glace Bay

33 46 55 58 73

Kings 30 41 52 60 67

Health Status and IncomeQuery: If health status is income related and

Glace Bay has a much higher proportion of low income respondents, why isn’t GB self-rated health status lower than Kings?

• Higher rates VG/excellent health across most income groups in Glace Bay

• As a result, overall rates are equivalent despite the higher rates of low income in Glace Bay and relationship between health and income. But why…..?

Self-Reported Stress

05

101520253035404550

Very Somewhat Not very Not At All

GBKings

Sources of Stress

Kings

• Too many demands

• Too many hours

• Insufficient autonomy

• Interpersonal conflict

Glace Bay

• Too few hours

• Risk

• Fear of layoffs

Stress and Employment

• Two-income families much more highly stressed than one-income families

• More two-income families in Kings

• Two-income families in Kings more highly stressed than in Glace Bay

• Kings – highest incomes = most stressed

• (AJHP: Stress = costliest of all risk factors)

Stress and Household Income

010203040506070

-20

20-34,9

9935-4

9,999

50-69,9

99

70,000+

GBKings

Social Support

Glace Bay Kings

Count on in crisis 95.5 94.4

Advice 94.6 91.6

Loved 96.8 94.7

Close relative 1/week 80.1 72.9

Neighbour 1/week 77.9 63.1

Faith, spirituality, safety…• Glace Bay had higher rates of self-reported

faith, spirituality, church attendance, decision control + half as likely to have been victimized or to know someone who has been victimized

In Sum: GB low stress, high faith, safety, social supports = non-material assets that partially compensate for poorer material conditions = key sources of life satisfaction & wellbeing + important information for community development planners (vs conventional tools)

Core Values - Guiding Life Principles

% rating 8 to 10 Glace Bay KingsFamily 95.2 94.4

Responsibility 93.2 93.2

Freedom 87.5 89.1

Friendship 88.4 86.4

Financial Security 80.6 72.4

Generosity 78.4 73.4

Pleasure 70.8 68.6

Spiritual 67.2 52.5

Career Success 68.0 58.3

Material Wealth 32.4 22.8

Importance of Core Values% Rating 8-10 Self Others

Family 94.9 55.9

Responsibility 93.3 50.8

Freedom 88.4 80.6

Friendship 87.3 54.2

Financial Security 76.3 76.9

Generosity 75.8 36.6

Pleasure 69.6 76.1

Spiritual 59.5 29.4

Career Success 62.8 92.4

Material Wealth 27.4 67.8

Value Alienation?

• Large majority of respondents in both communities believe they are socially motivated individuals living in a materialistic society

• Is dominant commercial culture, materialism out of touch with what matters most to people?

• Factor analysis: Positive social values intrinsically related to positive wellbeing while materialistic values were not - Consistent with growing research literature

Practical utility for policy. E.g:

• Glace Bay has significantly higher current smoke rate but lower ever-smoked rate = Quit rate much higher in Kings County -> Schools initiative

• Identify health needs, prevention/screening: E.g. Kings significantly higher rates than GB for mammogram (64% vs 40%), CBE (45% vs35%). Both low on Pap smear (47% vs 45%)

Mental health: Depressed feelings associated with child risk factors

05

10152025303540

0 1 2+

# factors

% w

ith

dep

ress

ion

GBKings

Results suggest new policy options

% workers willing to trade all or part of a future pay increase for shorter work hours

24.3

14.3

0

5

10

15

20

25

30

Kings Glace Bay

What would increase life-satisfaction? Kings County

Spend more time with family/friends

72 %

Less stress 71%

More money 53%

More possessions 16%

Greater focus on economic security vs consumption

• E.g. Core values: 3x high importance to financial security vs material wealth

• So policies that enhance job security, ensure living wage, social safety net appear closer to values than growth policies alone

• E.g. Benefits: Part-time workers less than half as likely to have most benefits + very strong relationship with income. E.g. GB: less than 5% lowest income have benefits. Cf Netherlands

Ecological Attitudes and Behaviours

• 83% said their way of life produces too much waste, & focuses too much on current consumption, not enough on conserving resources for future generations

• 85% said “most of us” buy and consume more than we need; 2/3 said they could consume less if they chose

• Stronger in Kings and among high-income (81% could consume less)

Understanding the ecological footprint

Income QuintileNova Scotia

Q1 Q2 Q3 Q4 Q5

Footprint 6.2 6.6 7.0 8.1 10.7

Household income$/year

Average #f

Vehicles/ Househo

ld

Average Kms./

Vehicle/ Year

Household Kms

Per Year

Av. Commuting Distance to Work

for H’holdcommuters

-20,000 1.0 17,777 13,772 14.4

20,000 to 34,999

1.4 19,268 22,629 12.9

35,000 to 49,999

1.5 20,861 27,530 16.4

50,000 to 69,999

1.8 20,966 34,665 14.4

70,000++ more SUVs

2.0 22,600 40,384 15.9

Total 1.6 20,853 28,916 15.1

Income and wellbeing –to a certain point…

“Despite the weak relation between income and global life satisfaction or experienced happiness, many people are highly motivated to increase their income.” (Daniel Kahneman-Economist, Princeton University)

“Economies thrive when individuals strive, but because individuals will only strive for their own happiness… they mistakenly believe that producing and consuming are routes to personal wellbeing” (Daniel Gilbert: Stumbling on Happiness. 2006)

And at most practical level:

• E.g: Kings: Volunteerism: 49% would give more time if asked: Esp: males - 55%; low income – 58% ; young (15 to 24) 76%

• E.g: Glace Bay: Identified problem areas -police chief immediate action

At the community level, fewer barriers to action. Power of evidence - can really inform practical decisions

+ Process = Result. E.g.:• Indicator selection, creating survey =

community building

• Farmers exchanging information

• Report releases in Sheffield Mills, Jeddore -farmers, fishermen present

• New ideas: e.g. restorative justice

• Results bring disparate groups together

Next Steps…. Update for which baseline data now available

KC, GB results at:

Can we do it?Percentage Waste Diversion in Nova Scotia

0

10

20

30

40

50

60

1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000

% D

iver

sion

Measuring what we value to leave prosperous and

healthy communities for our children

2. Why go beyond indicators?

• Continuing dominance of GDP makes it essential that new measures are critique of GDP-based measures vs “add-on’s”

• The side streets and the highway

• GDP is not an indicator, but an accounting system. To challenge its power and dominance, we must enter the world of economic valuation

• + Economic valuation reaches policy audience: Need for net vs gross accounting

+ Nothing changes behaviour like price signals. E.g.:

• SUVs and oil prices (vs envtal movement)

• Smoking and taxes (vs health messages) –youth smokers 15-24, 1999-2005

0

10

20

30

40

Year

Perc

enta

ge

CANADA NS

CANADA 32 29 27 26 25 23 22

NS 33 31 29 27 27 26 20

1999 2000 2001 2002 2003 2004 2005

Till we take aim at perverse messages of existing accounting

system, nothing will change

• A/c GDP-based accounting: The more fossil fuels we burn, more trees we cut, the better off we are

• Losses out of sight, out of mind: Local farms, cod, forests, voluntary work, free time (unmeasured)

• Current consensus on “injection” of “fiscal stimulus” to spur spending and growth. By contrast, recession, reduced consumption = R & R for natural world – dare we say it?!

Fishery GDP for Nova Scotia, 1984-1999 (1997$ millions): Depletion of

Natural Wealth as Economic GainNS Fishery GDP

0

100

200

300

400

1984

1987

1990

1993

1996

1999

Year

Mill

ions

of 1

997$

0

100

200

300

400

500

1970 1975 1980 1985 1990 1995 2000 2005Year

600

NS

Linear (NS)

Total Farm Cash Receipts, NS, 1971–2007

(Millions of $2007) = no early warning

Total Farm Operating Expenses, NS & PEI, 1971–2006 (Millions of $2007)

0

50

100

150

200

250

300

350

400

450

500

1970 1975 1980 1985 1990 1995 2000 2005

Mill

ions

of $

NS Farms

PEI Farms

50

55

60

65

70

75

80

85

90

95

100

105

110

1970 1975 1980 1985 1990 1995 2000 2005

Year

NS Expense to Income Ratio

Linear (NS Expense to Income Ratio)

Expense to Income Ratio (%), Nova Scotia Farms, 1971–2006

-30

-20

-10

0

10

20

30

40

50

60

70

80

90

100

110

120

130

140

1970 1975 1980 1985 1990 1995 2000 2005

Year

NS Farms

Linear (NS Farms)

Total Net Farm Income, Nova Scotia, 1971–2007 (millions of $2007)

Total Net Farm Income and Total Debt, NS Farms, 1971-2006

(millions of $2007)

Indicators & Accounts: Need both!

• Indicators assess progress – based on physical measures (e.g. crime rates, GHG emissions).

• Accounts assess value:

- Balance sheets, stocks = assets and liabilities

- Flows = what we earn and spend, including costs of economic activity, crime, GHG emissions

• GDP assesses market flows, treats social and environmental costs/benefits as “externalities.”

Accounting/valuation examples:

• Trends in volunteerism = indicator. Volunteer work contributes $1.8 billion to NS economy = accounts

• Crime costs NS $700 million + / year

• Smoking costs NS health care $171 million / year

• Stern (WB-UK): Compared GHG control costs (1% global GDP) with climate change damage costs (5%-20% global GDP). Concluded: "The benefits of strong, early action on climate change outweigh the costs.”

The Capital Accounting Model

• To assess nation’s true wealth, need to measure the value of natural, human, social, cultural, built, and financial capital.

• Only the latter two are currently valued but all capital is subject to depreciation and requires periodic re-investment. E.g. forests, health, crime, language, voluntary decline (vs car sector bailout)

• The good news – we are able to measure and even quantify aspects of the other capitals

Predictive power of new accounts Early warning vs “I told you so”

(vs ‘expert’ bank head analysis)

9.77.3

8.6 9.211.7

29.6

25.2 24.4

39.7

1.4

0

5

10

15

20

25

30

35

40

45

First Second Third Fourth Fifth

%

After-tax Income by Income QuintilesMedian Debt by Net Worth Quintiles

Examples of policy impacts:

• NS voluntary work worth $1.8 billiion/year

• Preventable chronic disease costs NS $500m in excess health care costs –> DHPP

• Costs tobacco, obesity, inactivity –> e.g. HRM planning process; smoke-free legislation

• Full CBAs – e.g. Solid Waste; Halifax Harbour cleanup; HRM transportation

Caveat: New GPI accounts do not seek to replace GDP

• … But replace the misuse of GDP as a measure of progress, wellbeing, and prosperity: Cite Kuznets warnings on proper use of GDP – what is growing

• Anything can make economic grow, incl. depletion of natural wealth + activities that signify decline in wellbeing, prosperity (e.g. crime, crashes, pollution)

• Quantitative measure of size cannot assess qualityof life, though GDP will always have role in assessing size of market economy – less important

To sum up so far:……..What do we measure? = Step 1

• What matters? – Community consultations on vision, goals = ownership

• 2 questions: (a) What kind of London, Dundee, Eden/Cornwall do we want to leave our children (10, 20, 50 years); (b) Are we better off today than we were at our children’s age?

• Universal vs partisan values, vision, goals + unique to culture, place -> specific indicators (vs vague, general)

• Participant circumstances, use of measures

Step 2 = How: (a) Data collection, survey instruments

• Random sample methods – stratification, sample size (statistical validity), cross-tabs.

• Construct survey instrument, test (ambiguity and meaningful results), data entry (e.g. GB = community training), data cleaning, data analysis. Transparency on data limitations

• Use of qualitative research (e.g. focus groups) and local wisdom

• Trends (indicators) and value (accounts) - CBA

Economic valuation: Full-Cost Accounting - 3 basic principles:

• Internalize ‘externalities’ (e.g. GHG emissions)

• Recognize economic value of non-market assets (e.g. voluntary sector, natural capital)

• Fixed -> variable costs (e.g. car registration, insurance a/c km driven)

$ values - strategic only = inadequacy of $ as valuation instrument. “Value” = larger

EXAMPLES (a speed tour): E.g. Transport Accounts

Each cost a potential headliner E.g. Congestion costs NS $12m/yr

• Lost time, gas, excess GHGs

• Conservative: Recurrent congestion only (not snow, roadworks, accidents etc.), AM-PM only, no freight, arterials only (no side-streets), based on <50% posted limit, etc.

• = Small portion total costs

Average Car Costs (per vehicle-km) Ranked by Magnitude

Aggregate Distribution of Costs for an Average Car

Full-Cost Accounting Results

• Overall full cost of N.S. road transportation system in 2002: $6.4 billion - $13.3 billion

• True cost is about $7,598/capita, of which $4,562 are “invisible” costs

• Fixed and external costs account for over 2/3 of total cost

• These results indicate an inefficient, unsustainable transportation system where externalities conceal the full costs to society

COSTS Low Medium HighOperating and amortized capital costs 72,500,000$ 72,500,000$ 72,500,000$ Beveraging Container Recycling Program (net) 14,300,000$ 14,300,000$ 14,300,000$ Used Tire Management Program (net) 2,700,000$ 2,700,000$ 2,700,000$ EtcEtcCosts to increase participation 5,000,000$ 7,000,000$ 9,500,000$ Total Costs 96,600,000$ 99,400,000$ 102,700,000$ Cost Per Capita 103$ 106$ 109$

BENEFITSEmployment benefits (direct) 2,800,000$ 3,300,000$ 3,900,000$ Employment benefits (indirect) 3,700,000$ 4,250,000$ 5,100,000$ Reduction in greenhouse gas emissions 3,300,000$ 34,200,000$ 84,300,000$ Reduction in air pollutant emissions 9,500,000$ 42,600,000$ 67,400,000$ Extended landfill life 18,800,000$ 18,800,000$ 18,800,000$ Avoided siting costs 175,000$ 175,000$ 175,000$ Avoided compensation 1,300,000$ 1,600,000$ 1,900,000$ Export revenue 1,100,000$ 1,400,000$ 1,650,000$ Tourism 190,000$ 190,000$ 190,000$ Energy savings from recycling 28,700,000$ 28,700,000$ 28,700,000$ RRFB diversion credits 4,980,000$ 4,980,000$ 4,980,000$ RRFB approved programs 4,400,000$ 4,400,000$ 4,400,000$ RRFB investment 250,000$ 250,000$ 250,000$ Total benefits 79,195,000$ 144,845,000$ 221,745,000$ Benefits per capita 84$ 154$ 236$ Net annual cost ( ) or benefit (17,400,000)$ 45,400,000$ 120,000,000$ Annual cost ( ) or benefit per capita (18)$ 48$ 127$ Net savings compared to pre-Strategy cost 31,200,000$ 94,000,000$ 167,800,000$ Annual savings per capita 33$ 100$ 178$

THE NOVA SCOTIA GPI SOLID WASTE-RESOURCE ACCOUNTS

Conventional Accounting Results

• Implementing Solid Waste-Resource Strategy led to an increase in operating and amortized costs from $48.6 million ($53/capita) in 1996 to $72.5 million ($77/capita) in 2001

–Increased cost of $24 million ($25/capita) for implementing the changes

–Conventional accounts stop there

Full cost Accounting Results = can be Good News

• The new NS solid waste-resource system in 2001 produced net savings of at least $31.2 million, when compared to the old 1996 solid waste-resource system

• This translates into savings of $33 for each Nova Scotian, versus a cost of $25 as suggested when comparing strictly the operating and amortized capital costs of the two systems

Benefits• Total benefits of 2000-01 system range from $79

million to $221 million =$84-$236 pp, incl: – $3.3 - $84.3 million in GHG emission

reductions; – $9 - $67 million in air pollutant reductions– $18.8 million in extended landfill life– $28.6 million in energy savings from recycling– $6.5 - $8.9 million in employment benefits– $1.2 - $1.9 million in avoided liability costs– $1.1 - $1.7 million in export revenue of goods

and services– $187,000 in additional tourism

Energy savings per tonne of waste recycled

Material Energy savings

Paper 8.5 million Btu

Plastic 20.1 million Btu

Glass 2.4 million Btu

Steel Cans 18.4 million Btu

Aluminium Cans 166.9 million Btu

Costs• Total costs of 2000-01 solid waste-resource system

were $96.6-102.7 million:

– $72.4 m. in operating and amortized capital costs

– $14.3 m. for beverage container recycling prog.

– $2.7 million for used tire management program

– $1.6 million in RRFB operating and admin costs

– $5 - $9.5 million to increase participation

– $220,000 - $1.8 million in nuisance costs

Indicators of Genuine Progress

– % diversion from landfills: <5%% -> 50%

– Access to curbside recycling in Nova Scotia jumped from less than 5% in 1989 to 99% today

– 76% of residents now have access to curbside organics pickup

– Access =by far the highest rates in the country, NS = global leader

– This is “genuine progress”

Cumulative potential damage cost avoidance through achieving the NS Environmental Goals and Sustainable Prosperity Act and Suzuki Foundation

Targets (based on graduated emission reductions from 2008-2020)EGSPA Target (10% below 1990) Suzuki Target (25% below 1990)

Damage Cost Avoidance (C$2005 millions)

Damage Cost Avoidance (C$2005 millions)Year

Emission Reductio

ns (tonnes)

Emission Reductio

ns (tonnes)

$36 per tonne $1,230 per tonne

$36 per tonne $1,230 per tonne

2008 397,000 $14.3 $488.3 622,000 $22.4 $765.1

2009 794,000 $28.6 $976.6 1,244,000 $44.8 $1,530.1

2010 1,191,000 $42.9 $1,464.9 1,866,000 $67.2 $2,295.2

2011 1,588,000 $57.2 $1,953.2 2,488,000 $89.6 $3,060.2

2012 1,985,000 $71.5 $2,441.6 3,110,000 $112.0 $3,825.3

2013 2,382,000 $85.8 $2,929.9 3,732,000 $134.4 $4,590.4

2014 2,779,000 $100.0 $3,418.2 4,354,000 $156.7 $5,355.4

2015 3,176,000 $114.3 $3,906.5 4,976,000 $179.1 $6,120.5

2016 3,573,000 $128.6 $4,394.8 5,598,000 $201.5 $6,885.5

2017 3,970,000 $142.9 $4,883.1 6,218,000 $223.8 $7,648.1

2018 4,367,000 $157.2 $5,371.4 6,840,000 $246.2 $8,413.2

2019 4,764,000 $171.5 $5,859.7 7,462,000 $268.6 $9,178.3

2020 5,161,000 $185.8 $6,348.0 8,084,000 $291.0 $9,943.3

Total 36,127,000 $1,300.6 $44,436.2 56,594,000 $2,037.4 $69,610.6

Cumulative potential co-benefits through achieving the NS Environmental Goals and Sustainable Prosperity Act and Suzuki Foundation Targets (based on

graduated emission reductions from 2008-2020)EGSPA Target (10% below 1990) Suzuki Target (25% below 1990)

Co-Benefits(C$2005 millions)

Co-Benefits(C$2005 millions)Year

Emission Reductio

n (tonnes)

Emission Reductio

ns (tonnes)

$13 per tonne $20 per tonne $13 per tonne $20 per tonne

2008 397,000 $5.2 $7.9 622,000 $8.1 $12.4

2009 794,000 $10.3 $15.9 1,244,000 $16.2 $24.9

2010 1,191,000 $15.5 $23.8 1,866,000 $24.3 $37.3

2011 1,588,000 $20.6 $31.8 2,488,000 $32.3 $49.8

2012 1,985,000 $25.8 $39.7 3,110,000 $40.4 $62.2

2013 2,382,000 $31.0 $47.6 3,732,000 $48.5 $74.6

2014 2,779,000 $36.1 $55.6 4,354,000 $56.6 $87.1

2015 3,176,000 $41.3 $63.5 4,976,000 $64.7 $99.5

2016 3,573,000 $46.4 $71.5 5,598,000 $72.8 $112.0

2017 3,970,000 $51.6 $79.4 6,218,000 $80.8 $124.4

2018 4,367,000 $56.8 $87.3 6,840,000 $88.9 $136.8

2019 4,764,000 $61.9 $95.3 7,462,000 $97.0 $149.2

2020 5,161,000 $67.1 $103.2 8,084,000 $105.1 $161.7

Total 36,127,000 $469.7 $722.5 56,594,000 $735.7 $1,131.9

Control cost estimates of meeting the NS Environmental Goals and Sustainable Prosperity Act and Suzuki Foundation Targets (based on graduated emission

reductions from 2008-2020)EGSPA Target (10% below 1990) Suzuki Target (25% below 1990)

Control Cost (C$2005 millions)

Control Cost (C$2005 millions)Year Emission

Reduction (tonnes)

Emission Reductio

ns (tonnes)

$12 per tonne $142 per tonne

$12 per tonne $142 per tonne

2008 397,000 $4.8 $56.4 622,000 $7.5 $88.3

2009 794,000 $4.8 $56.4 1,244,000 $7.5 $88.3

2010 1,191,000 $4.8 $56.4 1,866,000 $7.5 $88.3

2011 1,588,000 $4.8 $56.4 2,488,000 $7.5 $88.3

2012 1,985,000 $4.8 $56.4 3,110,000 $7.5 $88.3

2013 2,382,000 $4.8 $56.4 3,732,000 $7.5 $88.3

2014 2,779,000 $4.8 $56.4 4,354,000 $7.5 $88.3

2015 3,176,000 $4.8 $56.4 4,976,000 $7.5 $88.3

2016 3,573,000 $4.8 $56.4 5,598,000 $7.5 $88.3

2017 3,970,000 $4.8 $56.4 6,218,000 $7.5 $88.3

2018 4,367,000 $4.8 $56.4 6,840,000 $7.5 $88.3

2019 4,764,000 $4.8 $56.4 7,462,000 $7.5 $88.3

2020 5,161,000 $4.8 $56.4 8,084,000 $7.5 $88.3

Total 36,127,000 $61.9 $732.9 56,594,000 $97.0 $1,148.2

In Year 2020 Cumulative Over 2008-2020CO2 Equivalent Reduction Low

EstimateHigh Estimate Low

EstimateHigh Estimate

Maximum EGSP Act (5,150,000 tonnes)

Damage Avoidance

Climate Change Mitigation $185.8 $6,348.0 $1,300.6 $44,436.2

Co-Benefits $67.1 $103.2 $469.7 $722.5

Total Damage Avoidance $252.9 $6,451.2 $1,770.3 $45,158.7

Control Costs $4.8 $56.4 $61.9 $732.9

Ratio of Damage Avoidance to Control Costs 53:1 114:1 29:1 62:1

Net Benefits $248.1 $6,394.8 $1,708.4 $44,425.8

Maximum Suzuki (8,075,000 tonnes)

Damage Avoidance

Climate Change Mitigation $291 $9,943.3 $2,037.4 $69,610.6

Co-Benefits $105.1 $1,61.7 $735.7 $1,131.9

Total Damage Avoidance $396.1 $10,105.0 $2,773.1 $70,742.5

Control Costs $7.5 $88.3 $97 $1,148.2

Ratio of Damage Avoidance to Control Costs 53:1 114:1 29:1 62:1

Net Benefits $388.6 $10,016.7 $2,676.1 $69,594.3

Summary of damage avoidance benefits and control costs in year 2020 and cumulatively 2008-2020, (C$2005 mill.)

Cost-effectiveness:• Every $1 invested in reducing GHG emissions

through 2008-2020 will save $29 in avoided damages.

• When subtract control costs from benefits attained by avoiding climate change damages + achieving co-benefits (cleaner air), net cumulative benefit =

$846 million (10% below 1990 by 2020)$1.8 billion (25% below 1990 by 2020)

• Stern: "The benefits of strong, early action on climate change outweigh the costs."

Valuing Natural Capital Health

For example, a healthy forest effectively:

• Prevents soil erosion/sediment control

• Protects watersheds

• Regulates climate regulation/sequesters carbon

• Provides habitat for wildlife / biodiversity

• Supports recreation, tourism, aesthetic quality

• Provides timber

Valuing wetlands a/c function

• Flood prevention

• shoreline protection, erosion prevention

• storm control

• water purification

• storage and recycling of human waste

• spawning and nursery habitat for fish and shellfish

Wetland functions (ctd)• Carbon sequestration and storage

• sanctuary, breeding, nursery habitat for terrestrial, near-shore, & migratory birds

• feeding habitat for terrestrial wildlife

• nutrient recycling, production & storage

• recreation, education, science

• waste treatment

• food production

Forests a/c Conventional Accounts

Forests: Age and species structure = key indicators of

forest health / multiple functions

• NS forests have seen a sharp decline in valuable species such as white pine, eastern hemlock, yellow birch, and oak

• Forests more than 80 years now account for just over 1% of NS forest land – down from 25% in 1958 (not pristine)

Figure 2. Provincial Forest Area by Age Classes over 61 yrs., Percentage of Total Forest Area, 1958-2003

34.3

16.4

8.7

32.6

7

0.9

7.5

1.1

28.2

8.3

1.9

25.1

5

0.7

22.1

3.40.6

11.5

1.0 0.21.2 0.3

32.7

11.9

0

5

10

15

20

25

30

35

40

61-80 81-100 101+

perc

enta

g

1958

1965-71

1970-78

1975-82

1976-85

1979-89

1999 update

1997-2003

Figure 3. Provincial Forest Area by Age Classes up to 40 years of age, Percentage of Total Forest Area, 1958-2003

6.35.6

12.7

3.8

11.9

6.2

1310.6

16

12

20

16.3 15.3

23.9

12.8

0

5

10

15

20

25

30

Up to 20 yrs. 21 to 40 yrs.

perc

enta

g

1958

1965-71

1970-78

1975-82

1976-85

1979-89

1999 update

1997-2003

E.g. Economic valuation:NS Carbon loss = $1.3 bill.

• NS forests store 107 mill tonnes carbon, avoiding $2.2 billion in climate change damage costs

• But increased cutting, and loss of old growth and mature forests in NS since 1958, drastically reduced NS carbon storage capacity by 38%, costing estimated $1.3 billion in lost value.

• Based on the 1958 forest inventory, carbon stored would be worth $3.5 billion. Carbon loss in Nova Scotia's forests is now contributing to global climate change.

Estimated Annual Cost of Carbon Released due to Timber Harvest,

NS, 1975-97

0

5

10

15

20

25

1975 1980 1985 1990 1991 1992 1993 1994 1995 1996 1997

US

$ (m

illio

ns)

Excess clearcutting, loss of natural age & species diversity

have resulted in loss of:

• valuable species

• wide diameter and clear lumber that fetch premium market prices

• resilience and resistance to insect infestation

• wildlife habitat, & bird population declines

• forest recreation values -> nature tourism

This represents substantial depreciation

of a valuable natural capital asset.

• decline in forested watershed protection & 50% drop in shade-dependent brook trout

• soil degradation and leaching of nutrients that can affect future timber productivity

• substantial decline in carbon storage capacity & increase in biomass carbon loss

• decline in essential forest ecosystem services

Importance of Good News: E.g. V. 2: Best Forestry Practices in N. S.

• Selection harvesting increases forest value and provides more jobs

• Shift to value-added creates more jobs

• Restoration forestry is a good investment

• What incentives can encourage restoration

NB: Parallels to wetland restoration efforts

Natural Resource Accounts are not enough! - Onus on producers

• Measuring the demand side of the sustainability equation

• e.g. Forests: 20% of world’s people consume 84% paper; 20% consume 1%

• The equity dimension of sustainability

• Reporting to Canadians on impacts of behaviour - e.g. GHGs

Ecological footprint

• Demonstrates relationship between income, consumption, and environmental impact. Higher income groups have larger footprint: 30% of people are responsible for 70% of global resource consumption and waste generation

• It cuts through illusions that we can improve the living standards of the poor without also examining the consumption patterns of the rich and that we can “maintain” current excess

Local consumption patterns have global consequences

• Local consumption may involve natural resource depletion far away

• We may indulge unsustainably high levels of consumption in Canada and NS, perhaps even without depleting local resources, but rather by "appropriating the carrying capacity" of other countries through trade

• Footprint demonstrates accounting approach without monetization + indicator trend

Current Footprint Exceeds Sustainable Capacity of Earth

• If everyone in world consumed at NS levels, we’d need 4 planets Earth to provide the necessary resources + waste assimilation capacity

• Raising global living standards to current levels in the wealthy countries would therefore put an intolerable strain on the Earth's resources.

Global “ecological overshoot” is temporarily possible by:

– depleting reserves of natural capital (e.g., natural gas, old growth forests);

– over-harvesting renewable resources to the brink of collapse (e.g. fish stocks);

– causing irreversible ecological damage (e.g., species extinction)

– overloading environment with waste products (air & water pollution, GHGs - climate change, ozone depletion, etc.)

Ecological Footprint Projections, Canada, 1995-2020

Action–present/communicate + 10 types policy use and application

A. Short-term / immediate:

1. Goals / targets – only need baseline data (e.g. alcoholism, poverty, GHG emissions…). Researchers and policy makers work together to set ambitious yet realistic targets

2. Informed decision-making: What programscan achieve above results? (E.g. train comm. health workers, NS teen smoking prevention). + Identify particular needs = cost-effective

A. Short-term, ctd.

3. Education: demonstrate linkages among domains, interdependence of reality (e.g. education/ culture/environment)

4. Provide ongoing commentary – e.g. weekly media column, articles: GPI lens on key policies (e.g. stimulus packages). Advice: (a) state findings humbly, (b) include good news

Medium-term – requires trend data over time

5. Early warning signals – predictive power of new measures -> can trigger preventive remedial action

6. Evaluate programs – which work and which don’t to meet community goals & targets

7. Hold government accountable – at election time a/c objective standards – did gov’t attain targets during office; basis for election promises

Long-term structural change

8. Unifying force esp. in democracy – agreement on consensus goals/principles; parties debate strategy – how best to achieve goals.

9. Creative, innovative & new solutions to globalissues & crises created by old paradigm, & even reverse destructive trends: e.g. layoffs/economic collapse; fish stocks; climate change; decline of Indigenous languages/culture/knowledge…. By valuing natural, human, social, cultural capital

10. Policy uses of FCA – Where we are and where we want to go

Four Steps (we are at doorstep of #2):

• Build new accounting system – under way / feasible (beyond indicators)

• Political will to adopt fully and properly (Bhutan 1st sovereign nation to adopt officially?)

• System of financial incentives and penalties = government action (e.g. tax shifts)

• Prices that reflect true benefits and costs

Politics and Uptake:Measuring progress is normative

But GPI based on consensus values• Economic and livelihood security

• Health, free time

• Educational attainment

• Strong and safe communities, vibrant culture

• Clean environment, healthy natural resources

Political implications

• Non-partisan; Evidence-based decision making

• Consensus on goals, vision. Politics is about how to get there. E.g. GHG reductions, poverty reduction – goal vs strategy

• No “bad news” unless hidden from view. Shine spotlight – suggests solutions (e.g. vs layoffs)

3. Why Now? – Opportunities in the current downturn

or

How our economic system has failed us and why we

need a new paradigm

Growth-based economics

• The language – e.g. London Times

• How we measure growth

• Kuznets’ warning

• Fatal flaws in the growth paradigm

• How economics is taught (incl. media)

Natural environment

Society

Economy

From that perspective, begin with a different question:

What kind of world are we leaving our children...?

Reality-based economics

• Species extinction, large fish, forests

• Climate change – Stern (WB) report: "The benefits of strong, early action on climate change outweigh the costs."(1% GDP vs 5-20% GDP “now and forever”)

• The natural world – Recession achieves what we could not achieve through Kyoto: Bailing out the auto industry?

Reality-based accounting – a balanced (net vs gross) approach

• To assess nation’s true wealth, need to measure the value of natural, human, social, cultural, built, and financial capital.

• Only latter two are currently valued but allcapital is subject to depreciation and requires periodic re-investment. E.g. forests, health, culture, education

• Good accounts require: Stocks (balance sheets – assets/liabilities) + flows

Predictive power of new accounts Early warning vs “I told you so”

(cf ‘expert’ bank head analysis)

9.77.3

8.6 9.211.7

29.6

25.2 24.4

39.7

1.4

0

5

10

15

20

25

30

35

40

45

First Second Third Fourth Fifth

%

After-tax Income by Income QuintilesMedian Debt by Net Worth Quintiles

The fatal flaw – and why current ‘solutions’ will fail

• Debt-fuelled growth got us into this mess (personal/mortgage debt and ecological debt). Yet proposed solution = more debt-fuelled growth (governments)

• But root causes are in excess production/ consumption; boom and bust cycles that raise unrealistic expectations -> cruel disappointments

Fishery GDP for Nova Scotia, 1984-1999 (1997$ millions): Depletion of

Natural Wealth as Economic GainNS Fishery GDP

0

100

200

300

400

1984

1987

1990

1993

1996

1999

Year

Mill

ions

of 1

997$

0

100

200

300

400

500

1970 1975 1980 1985 1990 1995 2000 2005Year

600

NS

Linear (NS)

Total Farm Cash Receipts, NS, 1971–2007

(Millions of $2007) = no early warning

Total Farm Operating Expenses, NS & PEI, 1971–2006 (Millions of $2007)

0

50

100

150

200

250

300

350

400

450

500

1970 1975 1980 1985 1990 1995 2000 2005

Mill

ions

of $

NS Farms

PEI Farms

50

55

60

65

70

75

80

85

90

95

100

105

110

1970 1975 1980 1985 1990 1995 2000 2005

Year

NS Expense to Income Ratio

Linear (NS Expense to Income Ratio)

Expense to Income Ratio (%), Nova Scotia Farms, 1971–2006

-30

-20

-10

0

10

20

30

40

50

60

70

80

90

100

110

120

130

140

1970 1975 1980 1985 1990 1995 2000 2005

Year

NS Farms

Linear (NS Farms)

Total Net Farm Income, Nova Scotia, 1971–2007 (millions of $2007)

Total Net Farm Income and Total Debt, NS Farms, 1971-2006

(millions of $2007)

Opportunity and timing

• Conventional system bankrupt, “experts”fooled, shocked (Greenspan confession)

• Desperation -> fighting fire with fire, close ranks – Rep/Dem, G20 consensus

• In 6-9 months, when stimulus fails to stimulate and debt grows, open to alternative…: Lay the ground now:…….

Creative solutions

• Shrink creatively, fewer cars, reduce GHGs, waste, consumption, conserve resources. Dare we say: “Perhaps economy got too big!”

• Shorter work time vs layoffs, improve quality of life, increase free time, strengthen voluntary sector

• Redistribution – income/time/work; “sufficiency” economy; balance; self-reliance; fair trade vs free (more) trade = new economic mantras/principles

SWT = multiple forms/benefits

• Netherlands 1980s, KPMG, Rogers – reduce unemployment (and its costs – crime/sickness etc.), keep productive workers & know-how, avoid re-hiring, retraining costs, improve productivity

• 4-day week, longer vacations, sabbaticals, phased retirement (Sweden), reduce o’time, shorter workday (match school schedules)…

• Gov’t action: short-time incentive: 10% pay cut for 20% work cut (Belgian civil service)

In accord with core values% Rating 8-10 Self Others

Family (requires time) 94.9 55.9

Responsibility 93.3 50.8

Freedom 88.4 80.6

Friendship (requires time) 87.3 54.2

Financial Security 76.3 76.9

Generosity (e.g. volunteerism) 75.8 36.6

Pleasure 69.6 76.1

Spiritual 59.5 29.4

Career Success 62.8 92.4

Material Wealth 27.4 67.8

Value Alienation?

• Large majority of respondents in both communities believe they are socially motivated individuals living in a materialistic society

• Is dominant commercial culture, materialism out of touch with what matters most to people?

• Factor analysis: Positive social values intrinsically related to positive wellbeing while materialistic values were not - Consistent with growing research literature

In accord with ecological reality

• 20% consume 80% resources

• 20% = 84% paper; 20% = 1%

• 4 planets needed for all to consume a/c living standards of Canadians

• Excess consumption not correlated with wellbeing

Can we do it?Percentage Waste Diversion in Nova Scotia

0

10

20

30

40

50

60

1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000

% D

iver

sion

Measuring what we value to create a better future for our

children

Genuine Progress Index for Atlantic CanadaIndice de progrès véritable - Atlantique

www.gpiatlantic.org